Members' Reasonable Expectations May Scupper Scheme Amendments

For years employers and trustees have been amending benefits provided under defined benefit schemes safe in the expectation that their amendment would be effective provided the relevant party complied with consultation requirements and the amendment power in the trust deed and there was no infringement of section 67 Pensions Act 1995. In addition, trustees must have acted properly in accordance with their fiduciary duties and employers must have complied with their duty of good faith.

In relation to the employer's obligation of good faith, an important additional consideration has been highlighted following the recent High Court case of IBM v Dalgleish: Has the employer given members a reasonable expectation with regards to certain benefits to be provided under the scheme?